Wednesday Feb. 24 Premarket Analysis
Today in the Stock Market
Dear Fellow Traders
The market took another tumble as investors remain apprehensive ahead of the first day of testimony from Fed Chairman Ben Bernanke. He will be providing testimony in front of the Senate and Congress. According to some of the comments that I have heard he is going to try and calm investor anxiety that interest rates are right around the corner. Weaker consumer confidence could also be helping to drag down the Dow Jones lower by just over 100 points. The selloff does not come as too much as a surprise. The DJIA has rallied almost 400 points from the Feb. 5 low. On Tuesday the Dow opened at 10,383 and managed to rally to a high of 10,411. After the brief rally, the bears took over and drove the stock to a low of 10,267. The index settled a little higher to close at 10,282. WE WILL BE WAITING FOR THE REVERSAL TO RELOAD ON THE LONG SIDE WITH THE MARKET. (for options players…)
The tech sector also gave up more gains as the NASDAQ Composite dropped almost 29 points on Tuesday. However the selloff could have been sharper. QQQQ, the ETF of the NASDAQ Composite appears to be finding some support at $44.00. The ETF opened at $44.69 and only managed to rally a few cents, hitting a high of $44.74, before dropping sharply. The stock hit a low of $43.95 before rallying slightly higher to close at $44.16.
The U.S. dollar continues to hold its recent gains. Despite the problems the U.S. government faces the fear in Europe continues to drive investor sentiment. The strong U.S. dollar is having a major impact on commodity price. Both gold and oil have lost significant ground. GLD, the biggest gold ETF, retraced most of its recent gains and closed below support at $108. On Tuesday the ETF opened at $108.84 and managed to rally to a high of $108.91. However GLD started to slide hitting a low of $107.65. The ETF managed to close slightly higher to $107.89.
WDRP continues to hold its recent gains despite another move lower. Volume remains extremely high so it is surprise the stock remains strong. More than 27 million shares were traded on Tuesday. Because volume is lower than the recent average I am not too concerned with the recent selloff. If the stock can hold support above $0.02 it will attract new investors. On Tuesday the stock opened at $0.023 hit a modest high of $0.237. After hitting its high the stock traded lower for most of the session hitting low of $0.018. A modest rally in the afternoon helped push the stock to close at $0.0208.
Our latest pick, CBBV is finding some support at $0.20. The stock opened at $0.27, which was also the high of the day. Under the strong pressure the stock hit a low of $0.175 before bounce back to close at $0.20. Manage this trade properly with proper stop loss even if their are mental stop loss point.
We are seeing some interesting moves in BYSD. There was extreme volatility in the price action on Tuesday as the stock traded in a 10 cent range. The lower volume could be the reason behind the wide trading ranging. The stock opened at 0.27 and in the morning hit a high of $0.31. However the gains could not be sustained and by noon it was trading at its low of $0.21. If the volume can increase I think the stock would be able to revisit higher prices.
KNDR continues to show signs of building momentum. $0.05 is proving to be a very strong support level. The stock has traded at this level for the last 10 sessions. On Tuesday the stock opened at $0.05 and closed at $0.06. If volume can increase this stock could move higher very rapidly.
The last stock I wanted to talk about is SUNV, which was on our watch list in Monday’s newsletter. The stock has been under pressure for the last five sessions. The stock appears to be finding support at $0.10. Let’s keep watching it for the right sign.
Have a Great Trading Day
Francis
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